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7 May, 2002The union representing workers at the company's contract manufacturing plant in Shah Alam agrees to call off picket following settlement of dispute.
MALAYSIA: The IMF Southeast Asia Office reports that on May 6 a settlement was reached in the dispute between Flextronics Technology Shah Alam Sdn. Bhd. and the Electrical Industry Workers' Union (EIWU), an IMF affiliate organising workers at the company's plant in Shah Alam. Thus, 70 workers picketing the plant since April 29 and suspended from their jobs on May 3 went back to work on May 7.
The EIWU and the workers had contested Flextronics' refusal to continue recognition of the union and to comply with the collective agreement. The company, which is U.S.-owned and Singapore-based, bought the Swedish-owned Ericsson Mobile Communication in Shah Alam two years ago, at which time Ericsson recognised the EIWU as the workers' bargaining representative and had signed collective agreements with the union for 29 years.
However, in February of this year, Flextronics officially informed the EIWU it would no longer recognise the union, and in March the company began a total overhaul of the conditions of employment for its workers. The daily 8-hour shift system increased to 12 hours a day, with the extra 4 hours being compulsory overtime. Check-off was stopped, and management formed a company-controlled in-house "joint consultative committee" to represent its employees. The workers were so regimented as to have to sign a logbook in order to use the toilet, and, for Moslem employees, time and space for prayer were severely constrained. All hard-won benefits and terms in the collective agreement were lost, and workers were told to accept the minimum benefits provided under the 1955 Employment Act.
With the May 6 settlement, signed between the EIWU and Flextronics at a meeting held at the Human Resources Ministry, the following was agreed:
- Flextronics would forward the "Sales & Purchase Agreement" between Ericsson and Flextronics to the Conciliation Department of the Human Resources Ministry.
- The ministry would study the agreement and advise the union accordingly.
- All suspended workers would be requested to return to work as usual on May 7, 2002.
- The union would call off the picket immediately.
- All conditions of employment under the collective agreement would continue.
- The company would act on all employee grievances.